Social Preferences and Skill Segregation

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Social Preferences and Skill Segregation

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Antonio Cabrales
Antoni Calvó

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Antonio Cabrales

Abstract

This paper shows that models where preferences of individuals depend not only on their allocations, but also on the well-being of other persons, can produce both large and testable effects. We study the allocation of workers with heterogeneous productivities to firms. We show that even small deviations from purely “selfish” preferences leads to widespread workplace skill segregation. That is, workers of different abilities tend to work in di¤erent firms, as long as they care somewhat more about the utilities of workers who are “close”.

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Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 629.

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Date of creation: Jul 2002
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Handle: RePEc:upf:upfgen:629

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Find related papers by JEL classification:
A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
D64 - Microeconomics - - Welfare Economics - - - Altruism
D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

References listed on IDEAS
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Françis Kramarz & Stéfan Lollivier & Louis-Paul Pelé, 1996. "Wage Inequalities and Firm-Specific Compensation policies in France," Annales d'Economie et de Statistique, ADRES, issue 41-42, pages 16, Janvier-J. [Downloadable!]
Fershtman, C. & Weiss, Y. & Hvide, H.K., 2001. "Status Concerns and the Organization of Work," Papers 2001-2, Tel Aviv.
Kremer, M & Maskin, E, 1996. "Wage Inequality and Segregation by Skill," Working papers 96-23, Massachusetts Institute of Technology (MIT), Department of Economics.
Other versions:
- Michael Kremer & Eric Maskin, 1996. "Wage Inequality and Segregation by Skill," NBER Working Papers 5718, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Michael Kremer & Eric Maskin, 1996. "Wage Inequality and Segregation," Harvard Institute of Economic Research Working Papers 1777, Harvard - Institute of Economic Research.
Bolton, Gary E, 1991. "A Comparative Model of Bargaining: Theory and Evidence," American Economic Review, American Economic Association, vol. 81(5), pages 1096-136, December. [Downloadable!] (restricted)
Saint-Paul, Gilles, 1999. "On the Distribution of Income and Worker Assignment under Intra-Firm Spillovers, with an Application to Ideas And Networks," CEPR Discussion Papers 2290, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Other versions:
- Gilles Saint Paul, 1999. "On the Distribution of Income and Worker Assignment under Intra-firm Spillovers, with an Application to Ideas and Networks," Economics Working Papers 417, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
- Gilles Saint-Paul, 2001. "On the Distribution of Income and Worker Assignment under Intrafirm Spillovers, with an Application to Ideas and Networks," Journal of Political Economy, University of Chicago Press, vol. 109(1), pages 1-37, February. [Downloadable!] (restricted)
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Other versions:
- Fehr, Ernst & Schmidt, Klaus M., 1998. "A Theory of Fairness, Competition and Cooperation," CEPR Discussion Papers 1812, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory Of Fairness, Competition, And Cooperation," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 817-868, August. [Downloadable!] (restricted)
Charles Brown & James L. Medoff, 1989. "The Employer Size-Wage Effect," NBER Working Papers 2870, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Brown, Charles & Medoff, James, 1989. "The Employer Size-Wage Effect," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1027-59, October. [Downloadable!] (restricted)
Ernst Fehr & Klaus M. Schmidt, . "Theories of Fairness and Reciprocity - Evidence and Economic Applications," IEW - Working Papers iewwp075, Institute for Empirical Research in Economics - IEW. [Downloadable!]
Other versions:
- Fehr, Ernst & Schmidt, Klaus M., 2001. "Theories of Fairness and Reciprocity - Evidence and Economic Applications," CEPR Discussion Papers 2703, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Ernst Fehr & Klaus Schmidt, 2000. "Theories of Fairness and Reciprocity -- Evidence and Economic Applications," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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Benabou, Roland, 1993. "Workings of a City: Location, Education, and Production," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 619-52, August. [Downloadable!] (restricted)
Other versions:
- Roland Benabou, 1991. "Workings of a City: Location, Education, and Production," NBER Technical Working Papers 0113, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Rotemberg, Julio J, 1994. "Human Relations in the Workplace," Journal of Political Economy, University of Chicago Press, vol. 102(4), pages 684-717, August. [Downloadable!] (restricted)

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Pedro Rey-Biel, 2007. "Inequity Version and Team Incentives," UFAE and IAE Working Papers 677.07, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC). [Downloadable!]
Other versions:
- Pedro Rey Biel, 2004. "Inequity aversion and team incentives," Microeconomics 0407009, EconWPA. [Downloadable!]
- Pedro Rey-Biel, 2008. "Inequity Aversion and Team Incentives," Scandinavian Journal of Economics, Blackwell Publishing, vol. 110(2), pages 297-320, 06. [Downloadable!] (restricted)
Judith Hellerstein & David Neumark, 2007. "Workplace Segregation in the United States: Race, Ethnicity, and Skill," Working Papers 07-02, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
Other versions:
- Judith Hellerstein & David Neumark, 2006. "Workplace Segregation in the United States: Race, Ethnicity, and Skill," Working Papers 060710, University of California-Irvine, Department of Economics. [Downloadable!]
- Judith Hellerstein & David Neumark, 2005. "Workplace Segregation in the United States: Race, Ethnicity, and Skill," NBER Working Papers 11599, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
- Judith Hellerstein & David Neumark, 2004. "Workplace Segregation in the United States: Race, Ethnicity, and Skill," PPIC Working Papers 2004.05, Public Policy Institute of California.
- Judith K. Hellerstein & David Neumark, 2008. "Workplace Segregation in the United States: Race, Ethnicity, and Skill," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 459-477, 04. [Downloadable!] (restricted)
Antonio Cabrales & Raffaele Miniaci & Marco Piovesan & Giovanni Ponti, 2007. "An experiment on markets and contracts : do social preferences determine corporate culture?," Economics Working Papers we072010, Universidad Carlos III, Departamento de Economía. [Downloadable!]
Luiz Dias Bahia & Danilo Coelho & Alexandre Messa Silva & Sergei Soares, 2009. "A Evolução da Segregação por Qualificação Profissional ao Nível das Firmas," Discussion Papers 1406, Instituto de Pesquisa Econômica Aplicada - IPEA. [Downloadable!]

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